Grown Rogue International Inc.

(Expressed in United States Dollars, unless otherwise indicated) - Unaudited

Grown Rogue International Inc. (the “Company”) was incorporated under the Business Corporations Act (Ontario) on November 1, 2018. The primary cannabis product produced and sold is cannabis flower. The registered office is located at 40 King St W Suite 5800, Toronto, ON M5H 3S1.

The Company is a cannabis operator in Oregon, Michigan, New Jersey and with operations being provisioned in Illinois and Minnesota, USA and is engaged in the cultivation of and manufacturing of cannabis flower and extract products for wholesale and retail sales.

At the federal level, cannabis currently remains a Schedule I controlled substance under the Federal Controlled Substances Act of 1970. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision. As such, even in those states in which marijuana is legalized under state law, the manufacture, importation, possession, use or distribution of cannabis remains illegal under U.S. federal law. This has created a dichotomy between state and federal law, whereby many states have elected to regulate and remove state-level penalties regarding a substance which is still illegal at the federal level. There remains uncertainty about the US federal government’s position on cannabis with respect to cannabis-legal status. A change in its enforcement policies could impact the ability of the Company to continue as a going concern.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC. The results for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the full fiscal year.

During 2025, the Company determined that more than 50% of its outstanding common shares were held by U.S. stockholders and, as a result, no longer met the definition of a foreign private issuer under U.S. securities laws. Accordingly, commencing with the year ended December 31, 2025, the Company is required to present its financial statements in accordance with U.S. GAAP rather than IFRS® Accounting Standards as issued by the International Accounting Standards Board.

The Company has prepared audited consolidated financial statements in accordance with U.S. GAAP for the year ended December 31, 2025. These interim financial statements and the accompanying note disclosures have been prepared on a basis consistent with the Company’s audited consolidated financial statements and reflect only those adjustments necessary, in the opinion of management, for fair presentation of the results for the interim periods.

The Company’s reporting currency is the United States Dollar (“USD”). Effective January 1, 2026, the Company changed its functional currency from the Canadian Dollar (“CAD”) to the USD based on management’s determination that the USD had become the Company’s primary economic environment due to changes in underlying transactions, events, and operating conditions. All subsidiaries have a functional currency of USD.

The change in functional currency was applied prospectively from January 1, 2026 in accordance with ASC 830, Foreign Currency Matters. Translated amounts of non-monetary assets and liabilities at December 31, 2025 became the historical accounting basis for those assets and liabilities at January 1, 2026. The cumulative translation adjustment recognized in accumulated other comprehensive loss prior to the change has not been reversed and continues to be reported in equity.

For the comparative period (three months ended March 31, 2025), when the Company’s functional currency was CAD, assets and liabilities were translated to USD at exchange rates prevailing at the end of the reporting period, and income and expense items were translated at the average exchange rates for the period. Exchange differences arising from translation were recognized in other comprehensive income (loss) and reported as currency translation reserve in shareholders’ equity.

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenue, and expenses as well as the related disclosures. The Company must often make estimates about effects of matters that are inherently uncertain and will likely change in subsequent periods. Actual results could differ materially from those estimates.

Areas requiring a significant degree of estimation and judgment relate to the assessment of transactions as business combinations or asset acquisitions, estimates used in valuation and costing of inventory, impairment of long-lived assets and indefinite lived intangible assets, fair value measurements, the recoverability and measurement of deferred tax assets and liabilities, share-based compensation, fair value of derivative assets and liabilities, and consolidation of entities in which the Company holds less than a majority of voting rights.

These financial statements incorporate the accounts of the Company and all the entities in which the Company has a controlling voting interest and is deemed to be the primary beneficiary. All consolidated entities were under common control during the entirety of the periods for which their respective results of operations were included in the consolidated statements from the date of acquisition. All intercompany balances and transactions are eliminated upon consolidation.

A summary of the Company’s subsidiaries included in these financial statements as at March 31, 2026 is as follows:

All subsidiaries of the Company were incorporated in the United States of America and have USD as their functional currency.

The accounting policies used in the preparation of these financial statements are consistent with those described in the Company’s audited consolidated financial statements for the year ended December 31, 2025. Material accounting policies applied in these condensed consolidated financial statements as follows:

Revenue

Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) when goods or services are transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

In order to recognize revenue under ASC 606, the Company applies the following five steps:

In order to recognize revenue under ASC 606, the Company applies the following five steps:

Revenue From Sales of Goods

Revenue from the sale of goods is generally recognized when control over the goods has been transferred to the customer. Payment for sales is typically due prior to shipment. The Company has elected to treat shipping and handling activities as a fulfillment activity, meaning these activities are not considered a separate performance obligation. Shipping and handling fees billed to customers are recognized as revenue at the time control of the goods passes to the customer. Costs incurred by the Company for shipping and handling are classified as cost of sales in the consolidated statements of income (loss) and comprehensive income (loss). Payment for wholesale transactions is due within a specified time period as permitted by the underlying agreement and the Company’s credit policy upon the transfer of goods to the customer. The Company generally satisfies its performance obligation and transfers control to the customer upon delivery and acceptance by the customer. Revenue is recorded at the estimated amount of consideration to which the Company expects to be entitled.

Service Revenue

Revenues from services consist of one performance obligation, being the provision of the agreed upon services. The Company recognize service revenue when the contracted services have been provided and the income is determinable. The Company’s contract terms do not include a provision for significant post-service delivery obligations.

Inventory

Inventory consists of (i) raw materials, consumables and packaging supplies used in the process to prepare inventory for sale, (ii) work in process consisting of pre-harvested cannabis plants, and (iii) finished goods.

Inventory is valued at the lower of cost and net realizable value, with cost determined using the weighted average cost method. Net realizable value is calculated as the estimated selling price in the ordinary course of business, less any estimated costs to complete and sell the goods. Costs are capitalized to inventory, until substantially ready for sale. Costs include direct and indirect labor, raw materials, consumables, packaging supplies, utilities, facility costs, quality and testing costs, production related depreciation and other overhead costs including operating lease costs.

The Company records inventory reserves for obsolete and slow-moving inventory. Inventory reserves are based on inventory obsolescence trends, and the historical and professional experience of management. The Company classifies cannabis inventory as a current asset, although, due to the duration of the cultivation, drying, and conversion process, certain inventory items may not be realized in cost of sales within one year.

Financial instruments

Financial instruments are contracts that give rise to a financial asset of one party and a financial liability or equity instrument of another party. Financial instruments are recorded initially at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Subsequent measurement depends on how the financial instrument has been classified and may be at fair value or amortized cost. For financial instruments subsequently measured at fair value, the Company calculates the estimated fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available, the Company uses standard pricing models including the Black-Scholes option pricing model.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 - Inputs that are not based on observable market data.

There have been no transfers between fair value hierarchy levels during the years ended December 31, 2025 and 2024.

The Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are recorded at cost. The carrying values of these financial instruments approximate their fair value due to their short-term maturities. The Company’s note receivable, long-term debt, and convertible debentures are valued at amortized cost using the effective interest rate method. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest risks arising from these financial instruments. The Company’s warrant asset and derivative liability are measured using the Black-Scholes option pricing model (Notes 6 and 13, respectively).

Share-based compensation

Share-based compensation expense consists of the Company’s stock option and restricted share unit expense.

Stock options and restricted share units granted to employees and consultants are measured based on the grant-date fair value. Share-based compensation expense for stock options is generally recognized based on the straight-line basis over the requisite service period. The Company has elected to account for forfeitures of share-based awards as they occur rather than estimating forfeitures at the grant date. Accordingly, stock-based compensation expense is recognized assuming all awards will vest, and previously recognized compensation cost is reversed in the period in which an award is forfeited due to an employee’s failure to satisfy the applicable service conditions.

Share-based compensation for restricted share units is recognized at the time of grant by multiplying the share price on the date of grant by the number of restricted share units granted. Share-based compensation expense is included in share-based compensation expense or cost of finished cannabis inventory sold based on the employee’s function classification.

Consideration paid to the Company on the exercise of stock options is recorded as subordinate voting common shares (“SV Shares”).

Income taxes

The Company uses the asset and liability method to account for income taxes. Deferred income tax assets and liabilities are determined based on enacted tax rates and laws for the years in which the differences are expected to reverse.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

As the Company operates in the cannabis industry, it is subject to the limits of IRC Section 280E, under which the Company is only allowed to deduct expenses directly related to the cost of producing the products or cost of production.

The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of loss and comprehensive loss.

For interim reporting purposes, the Company computes its income tax provision using an estimated annual effective tax rate method, as required under ASC 740. Under this method, the Company estimates its annual effective income tax rate and applies that rate to year-to-date ordinary income or loss to determine the interim tax provision. The estimated annual effective tax rate reflects expected annual taxable income or loss, permanent items and discrete items identifiable to specific periods, which are recognized in the period in which they occur. The estimated annual effective tax rate is reviewed and updated at each interim reporting date, with any adjustment recognized in the period of change.

Recently adopted accounting pronouncements

In July 2025, the Financial Accounting Standards Board issued Accounting Standards Update 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. The objective of this update is to reduce the cost and complexity of applying the current expected credit loss model to short-term accounts receivable and contract assets. ASU 2025-05 addresses these challenges by introducing a practical expedient that allows entities to assume that current conditions as of the balance sheet date do not change over the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. The Company adopted ASU 2025-05 as of January 1, 2026.

Recently issued accounting pronouncements not yet effective**

**In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-03 (“ASU 2024-03”), Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): update required disclosure of specified information about certain costs and expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026. The Company has not adopted this standard early. The Company is currently evaluating the impact of the adoption of this amendment.

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-04,Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The amendments clarify when the settlement of convertible debt should be accounted for as an induced conversion versus a debt extinguishment and update related accounting and disclosure requirements. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. The Company has not early adopted this amendment but does not expect adoption to have a material impact on the Company’s financial statements and disclosures.

The Company’s accounts receivable composition is as follows:

As at March 31, 2026, trade receivables was presented net of an allowance for expected credit losses of $701,365 (December 31, 2025 - $748,239). Taxes receivable relate to goods and services taxes receivable from the Government of Canada.

The Company’s inventory composition is as follows:

The Company records adjustments to inventory for excess and obsolete items based on historical usage, forecasted demand, and market conditions. No such adjustments were made for the periods presented.

Warrants are comprised of 10,000,000 warrants of Vireo Growth Inc. (“Vireo Growth”). The warrants may be exercised for 10,000,000 subordinate voting shares of Vireo Growth, at a strike price equal to $0.233 (CAD$0.317) (the “Vireo Warrants”).

The Vireo Warrants are remeasured at fair value through profit and loss at each reporting period using the Black-Scholes option pricing model. The fair value of the Vireo Warrants at March 31, 2026, was estimated to be $2,912,188 (December 31, 2025 - $5,103,272) using the following inputs:

During the three months ended March 31, 2026, the Company recorded an unrealized loss on the change in fair value of the warrants asset of $2,191,084 (Q1 2025 - $1,172,492).

On March 5, 2024, the Company signed a definitive agreement to form Rogue EBC, a joint venture with EBC Ventures. Rogue EBC holds a craft growers license with the Illinois Department of Agriculture. Grown Rogue owns 70% of the joint venture and has contributed capital to support the development of the facility. The joint venture agreement includes multiple purchase options, which ultimately give the Company the ability to acquire 100% of the membership interests of the joint venture subject to approval by the Illinois Department of Agriculture. The Company does not have the unilateral ability to direct activities of Rogue EBC and therefore the investment constitutes a joint venture in accordance with ASC 323, Investments – Equity Method and Joint Ventures.

The investment in Rogue EBC has been accounted for using the equity method as follows:

The following table presents summarized financial information for Rogue EBC:

Transactions related to the Company’s notes receivable for the period ended March 31, 2026 and year ended December 31, 2025, include the following:

No allowance for credit losses has been recorded as of March 31, 2026 and December 31, 2025.

For the three months ended March 31, 2026 and 2025, depreciation included in cost of finished cannabis inventory sold was $822,531 and $315,216, respectively. For the three months ended March 31, 2026 and 2025, $91,162 and $104,984, respectively, was included in depreciation on the condensed consolidated statements of income (loss) and comprehensive income (loss).

The Company’s leases consist of land and buildings and equipment used in the cultivation, processing, and warehousing of its products. The leases were classified as either operating leases or finance leases in accordance with ASC 842, Leases.

A summary of the maturity of contractual undiscounted liabilities associated with the Company’s operating leases and finance leases as of March 31, 2026 is as follows:

A summary of the Company’s weighted average discount rate used in calculating lease liabilities and weighted average remaining lease term is as follows:

For the three months ended March 31, 2026, operating lease costs of $199,415 (Q1 2025 - $462,947) was included in cost of finished cannabis inventory sold.

On March 31, 2026, following the execution of an amendment on April 8, 2026 to extend one of its commercial facility leases, the Company recognized additions to right-of-use assets and operating lease liabilities of $969,222 each. The facility lease is with the Company’s CEO, and the extension reflects the exercise of a five-year extension option included in the original lease agreement. The extended lease term commences on July 1, 2026 and expires on June 30, 2031. Base rent during the extension period begins at $20,000 per month in the first year and increases by 3% annually.

Transactions related to the Company’s long-term debt for the three months ended March 31, 2026 and year ended December 31, 2025 include the following:

During the three months ended March 31, 2026, the Company recognized accretion expense of $42,210 (2025 - $nil) on amortization of debt financing costs on long-term debt.

A summary of the maturity of contractual undiscounted liabilities associated with the Company’s long-term debt as of March 31, 2026 is as follows:

Transactions related to the Company’s convertible debentures for the three months ended March 31, 2026 and year ended December 31, 2025 include the following:

On March 27, 2025, the Company entered and closed a $7,000,000 credit facility with Bridge Bank, a division of Western Alliance Bank (“WAB”), which is a national, FDIC-insured commercial bank. The Company incurred financing costs of $263,374 in connection with closing the loan. The Company intends to use the loan proceeds to support existing growth initiatives, provide additional working capital, and refinancing a small amount of existing debt. The credit facility has a term of four years and bears interest at a rate equal to the greater of a)the Secured Overnight Financing Rate (“SOFR”) plus 4.9% and b) 9.0% per annum. Based on the current SOFR rate of 4.3%, this implies a current interest rate of 9.2% per annum. The facility amortizes over a six-year period and there are no prepayment penalties. Interest will be paid on a monthly basis. On September 9, 2025, the Company amended the credit facility limit to a maximum of $12,000,000 and a further $5,000,000 was drawn.

On May 14, 2025, the Company executed an interest rate swap transaction with WAB for Tranche 1. The Company will bear interest of 8.07% per annum whereas WAB bears 4.32520% plus 400 bps interest per annum. The interest rate swap gives rise to a derivative liability, which was initially recorded at $92,124.

On September 15, 2025, the Company executed an interest rate swap transaction with WAB for Tranche 2. The Company will bear interest of 7.53% per annum whereas WAB bears 4.1739% plus 400 bps interest per annum. The interest rate swap gives rise to a derivative liability, which was initially recorded at $24,644.

The derivative liability was remeasured at March 31, 2026, and was estimated to be $70,664 for both tranches.

The following is a summary of movements in the interest rate swap during the three months ended March 31, 2026 and year ended December 31, 2025:

On January 1, 2026, as a result of the change in functional currency from CAD to USD (Note 2.1), certain warrants previously classified in equity no longer met the criteria for equity classification as the warrants possess exercise prices in CAD and no longer represent an instrument for providing the Company with fixed proceeds in exchange for a fixed number of its shares due to foreign exchange. As such, the warrants are accounted for as derivative liabilities measured at fair value. The previously recorded equity balances associated with these warrants were derecognized at their fair value measured on January 1, 2026 with the resulting difference recorded within paid in capital. No gain or loss was recognized in earnings upon reclassification.

The warrant liabilities are subsequently measured at fair value at each reporting date, with changes in fair value recognized through profit or loss. The fair value of the warrant liabilities was determined using a Black-Scholes option pricing model, which incorporates significant unobservable inputs (expected stock price volatility and estimated term) and is classified within Level 3 of the fair value hierarchy.

During the three months ended March 31, 2026, the Company recorded an unrealized gain on changes in fair value of warrant liabilities of $770,714 (Q1 2025 - $nil).

The warrant liabilities were measured using the following weighted average inputs in the Black-Scholes option pricing model:

As at March 31, 2026 and December 31, 2025, the following warrants were issued and outstanding:

The Company has determined that the conversion feature embedded in the Company’s convertible debentures constitute a derivative liability and they have been bifurcated from the convertible debentures on closing and recorded as a conversion feature of $4,793,472, with a corresponding discount recorded to the associated debt, on the accompanying balance sheets to be amortized over the term of the convertible debentures.

The following is a summary of movements in the conversion feature during the three months ended March 31, 2026 and year ended December 31, 2025:

Significant assumptions used in calculating the fair value of the conversion feature of the convertible debentures at the date of issuance and December 31, 2024, are as follows:

The Company is authorized to issue an unlimited number of Subordinate Voting Shares (“SV Shares”) and Multiple Voting shares (“MV Shares”) at no par value and an unlimited number of preferred shares issuable in series. The SV Shares can be converted into MV Shares at a conversion ratio of 1,000:1, and the MV Shares carry 1,000 votes per share.

The directors may declare dividends on one or more class of shares to the exclusion of the others or declare dividends at different rates on different classes of shares, at their discretion. No dividends shall be declared on SV Shares or the MV Shares if to do so would reduce the value of the net assets of the Company to less than the paid in capital of the common stock.

No dividends were declared on the Company’s SV Shares or MV Shares during the three months ended March 31, 2026 and the year ended December 31, 2025.

During the three months ended March 31, 2026, the Company’s subsidiary Golden Harvests, LLC, declared and paid a dividend of $56,800 (Q1 2025 - $nil) to its non-controlling interest holder.

During the three months ended March 31, 2026, the Company’s subsidiary, GRMA, declared and paid preferred return distributions on the voting preferred units of GRMA (the “GRMA Units”) of $28,356 (Q1 2025 - $nil) to its non-controlling interest holder.

The following table summarizes the warrant activities for three months ended March 31, 2026 and the year ended December 31, 2025:

The Company’s board of directors adopted the 2020 Equity Incentive Plan (the “Plan”) on July 21, 2020. The maximum number of common shares that may be issued in respect of awards under the Plan is equal to 20% of the total SV Shares outstanding. The Company may issue stock options, stock appreciation rights, restricted stock and restricted stock units (“RSU’s”).

The following table summarizes the stock option movements for the three months ended March 31, 2026 and year ended December 31, 2025:

On January 22, 2026, the Company granted 225,000 stock options to employees of the Company. The stock options have an exercise price of $0.39 (CAD$0.55) and expire on December 31, 2029. The options vest in three equal tranches on each of December 31, 2026, December 31, 2027 and December 31, 2028.

During the three months ended March 31, 2026,200,000 options were exercised into SV shares for gross proceeds of $21,839 (CAD$30,000).

The following is a summary of the outstanding stock options as at March 31, 2026:

During the three months ended March 31, 2026, the Company recognized share-based compensation expense of $154,994 (Q1 2025 - $312,629) related to vesting of stock options. As at March 31, 2026, the Company has unrecognized stock-based compensation expense of $616,764 associated with outstanding stock options.

The Company computes the fair value of stock options granted using the Black-Scholes option pricing model. The expected term used for options issued to non-employees is the contractual life and the expected term used for options issued to employees and directors is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee share purchase option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

The Company applied the following inputs in the Black-Scholes option pricing model for the three months ended March 31, 2026 and year ended December 31, 2025:

The following table summarizes the RSU’s movements for the three months ended March 31, 2026 and year ended December 31, 2025:

The following is a summary of the outstanding RSU’s as at March 31, 2026:

The Company computes the fair value of RSU’s granted based on the Company’s share price at the grant date. During the three months ended March 31, 2026, share-based compensation expense includes $nil related to RSU’s (Q1 2025 - $1,123,281).

The calculation of earnings per share for the three months ended March 31, 2026 and 2025 are as follows:

The following table displays the securities that have been excluded from the computation because their effects would be anti-dilutive:

The Company is a Canadian resident company, as defined in the Income Tax Act (Canada) (the “ITA”), for Canadian income tax purposes. However, it has subsidiaries that are treated as United States corporations for US federal income tax purposes per the Internal Revenue Code (US) (“IRC”) and are thereby subject to federal income tax on their worldwide income. As a result, the Company is subject to taxation both in Canada and the United States.

The Company has computed its provision for income taxes based on the actual effective tax rate for the quarter as management believes this is the best estimate for the annual effective tax rate. Significant judgment is required in evaluating the Company’s uncertain tax position and determining the provision for income taxes.

A summary of the Company’s income tax expense and effective tax rate is as follows:

As at March 31, 2026, the Company recorded an uncertain tax liability of $9,280,905 (December 31, 2025 - $8,383,888) for uncertain tax positions primarily related to the treatment of certain transactions and deductions under IRC Section 280E based on legal interpretations that challenge the Company’s tax liability under IRC Section 280E. These uncertain tax positions, inclusive of penalties and interest, are included in Other non-current liabilities on the condensed consolidated balance sheets, net of net operating loss carry-forwards.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. There are no positions for which it is reasonably possible that the uncertain tax benefit will significantly increase or decrease within twelve months. The Company files income tax returns in the United States, including various state jurisdictions, and in Canada, which remain open to examination by the respective jurisdictions for the 2018 tax year to the present.

The changes to the Company’s operating assets and liabilities for the three months ended March 31, 2026 and 2025 are as follows:

Interest and income taxes paid in cash for the three months ended March 31, 2026 and 2025 were as follows:

Non-cash investing and financing activities for the three months ended March 31, 2026 and 2025 are as follows:

During the three months ended March 31, 2026 and 2025, the Company incurred the following related party transactions.

Transactions with related parties

Related parties of the Company include affiliates, entities for which investments are accounted for by the equity method, officers, and directors of the Company and members of their immediate families, and management involved in the financial statement preparation and members of their immediate families.

Transactions with related parties are presented in the following table:

Included in accounts payable and accrued liabilities as at March 31, 2026 was $530,740 (December 31, 2025 - $159,413) due to related parties. As at March 31, 2025 lease liabilities (comprised of operating and finance lease liabilities) of $1,053,512 (December 31, 2025 - $1,237,695) were due to related parties.

Debt balances and movements with related parties

The following table sets out portions of debt pertaining to related parties which are included in consideration payable on business acquisitions and long-term debt:

As part of the agreements transacted during the year ended October 31, 2020, to acquire interest in GR Michigan and Canopy, the Company incurred consideration payable on business acquisitions of $360,000 which has a maturity date of April 1, 2028. During the three months ended March 31, 2026, interest payments of $13,500 were made against this balance (2025 - interest payments of $16,200).

Pursuant to the Canopy purchase agreement executed on April 24, 2024, the Company, through GR Unlimited, acquired the remaining 13% of the membership units in Canopy. As part of this transaction, the Company purchased a 5.5% membership interest in Canopy from the CEO, comprised of an upfront cash payment of $66,000 and deferred cash payments of $264,000. Additionally, the Company purchased a 2.5% membership interest in Canopy from a Director, comprised of an upfront cash payment of $30,000 and deferred cash payments of $120,000. The deferred cash payments are to be paid in 48 equal installments at a 5.21% interest rate with a maturity date of April 24, 2028.

During April 2024, the Company, through Canopy, acquired an additional 20% of the membership units in Golden Harvest from the GM for aggregate present value consideration of $2,342,207, comprised of deferred cash payments of $2,000,000 plus true-up amounts. Pursuant to the purchase agreement executed on April 24, 2024, the deferred cash payments are to be paid in thirteen quarterly installments beginning on January 1, 2025 with a maturity date of July 27, 2027.

On May 29, 2025, Canopy Management LLC was dissolved, and all existing agreements and obligations were assigned and transferred to Grown Rogue Unlimited, LLC.

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis, categorized within the fair value hierarchy:

The fair value of the warrants asset is measured using the Black-Scholes option pricing model with inputs including the underlying share price, risk-free interest rate, expected volatility, and remaining term, consistent with the valuation methodology applied in the Company’s audited consolidated financial statements for the year ended December 31, 2025.

The derivative liability represents the bifurcated conversion features embedded in the Company’s convertible debentures, accounted for separately under ASC 815. The fair value is measured using the Black-Scholes option pricing model with inputs including the underlying share price, risk-free interest rate, expected volatility, and remaining term to maturity, consistent with the valuation methodology applied in the Company’s audited consolidated financial statements for the year ended December 31, 2025.

The reportable segments are those operations whose operating results are reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated. The Company’s CODM is the CEO and is responsible for the management of the Company. Operating results are reviewed with respect to resource allocation and for which discrete financial information is available. Inter-segment transactions are recorded at amounts that reflect normal third-party terms and conditions, with inter-segment profits eliminated from the cost base of the segment incurring the charge. The Company has identified three operating segments:

The Company’s general corporate administration expenses are included within “Corporate” to reconcile the reportable segments to the financial statements. The Company’s CODM reviews the results of the Company’s operating segments based on the total revenues, gross profit and net income (loss) in his evaluation of the performance of the operating segments to make decisions regarding resource allocations within the Company.

Segmented operational activity for the three months ended March 31, 2026 and 2025 is as follows:

Entity-wide disclosures

All revenue for the three months ended March 31, 2026 and 2025 was earned in the United States. For the three months ended March 31, 2026 and 2025 no customer represented more than 10% of the Company’s net revenue. As at March 31, 2026 and December 31, 2025, no customer represented more than 10% of the Company’s receivables.

A summary of the Company’s long-lived tangible assets disaggregation by geographic area is as follows:

The activity in non-controlling interest for three months ended March 31, 2026 and year ended December 31, 2025 are as follows:

During the three months ended March 31, 2026, the Company sold 20% of its ownership in GRMA through the sale of 20 voting preferred units of GRMA (the “GRMA Units”) at a par value of $150 per unit for gross proceeds of $3,000,000 and paid issuance costs of $15,000. The GRMA Units pay a minimum cumulative non‑compounded preferred return of 15% per annum on unreturned capital contributions. If required quarterly distributions are not paid within the specified grace period, the preferred return increases to 20% per annum, compounded quarterly, until paid.

On September 22, 2022, the Securities Exchange Commission (“SEC”) issued an Order Instituting Proceedings (OIP) pursuant to Section 12(j) of Securities Exchange Act of 1934 (“1934 Act”), against the Company alleging violations of the 1934 Act, as amended, and the rules promulgated thereunder, by failing to timely file periodic reports. Section 12(j) authorizes the SEC as it deems necessary or appropriate for the protection of investors to suspend for a period not exceeding 12 months, or to revoke, the registration of a security if the SEC finds, on the record after notice and opportunity for hearing, that the issuer of such security has failed to comply with any provision of the 1934 Act, as amended, or the rules promulgated thereunder. The Company has filed an answer to the Order Instituting Proceedings and is seeking a hearing in the matter. The Company is currently fully compliant with all of its filings and has recently filed a form F1 which is pending acceptance by the SEC. The Company anticipates that it will be able to waive this OIP after acceptance.

On December 8, 2025, ABCO, entered into an agreement with Blackwell & Associates, (“Blackwell”) for the construction of the Grandview Phase II project located at 1425 Grandview Avenue, Paulsboro, New Jersey. Under the agreement, payment is structured on a cost-plus-a-fee basis without a guaranteed maximum price. The total estimated cost of the project is approximately $1,430,000 which includes the cost of the work plus Blackwell’s fee. Blackwell’s fee is comprised of 6% overhead and 9% profit applied to the cost of the work as defined in the agreement. Because the agreement does not include a guaranteed maximum price, the final cost of the work may differ from this estimate, and the Company’s ultimate obligation under the contract could be higher or lower than the estimated amount depending on actual costs incurred. Work is required to commence no later than 10 days from the date of the agreement, with substantial completion targeted by April 15, 2026, subject to adjustments for changes in the contract documents. The work may be approved and executed in phases at the Company’s discretion, with Company approval required in writing for each phase. Either party may terminate the contract for cause or convenience; however, no termination fee is payable to Blackwell in the event the Company terminates for convenience. Blackwell is considered a related party as it is controlled by the spouse of the majority owner of ABCO Holdings.

Sea Craft, LLC Acquisition

On March 11, 2026, the Company, through its majority-owned subsidiary Grown Rogue Management Associates, LLC (“GRMA”), entered into a Membership Interest Purchase Agreement with the members of Sea Craft, LLC (“Sea Craft”), the holder of an Illinois Adult Use Cannabis Craft Grower License. Pursuant to the agreement, and subject to receipt of the regulatory approvals necessary to consummate the transaction, GRMA agreed to acquire 49% of Sea Craft’s issued and outstanding ownership interests. The agreement also grants the majority holder of Sea Craft’s remaining issued and outstanding ownership interests an option, subject to certain conditions precedent, to require GRMA to purchase those remaining interests.

As at March 31, 2026, the regulatory approvals required to consummate the transaction had not been obtained, and accordingly, the acquisition had not closed.

The Company evaluated subsequent events through the date the financial statements were issued, and determined that the following subsequent events occurred as of that date:

On April 8, 2026, the Company executed an amendment to extend one of its commercial facility leases representing the exercise of a five-year extension option under the original lease agreement. The extended lease term commences on July 1, 2026 and expires on June 30, 2031. Base rent during the extension term begins at $20,000 per month in the first year and increases by 3% annually. The facility, located in Jackson Country, Oregon is leased from the Company’s CEO. The extension has been reflected in the Company’s lease liabilities and right of use assets as an addition at March 31, 2026.